Tuesday, March 25, 2014

Triple Net Leased Office Building For Sale

The Boulder Group is pleased to exclusively market for sale a single tenant net leased, Class A office/education building tenanted by Brown Mackie College (NASDAQ: EDMC) located in South Bend, Indiana. The 47,537 square foot Brown Mackie College office building was built in 2009 on a 6.08 acre parcel along a primary east-west thoroughfare in South Bend. Brown Mackie College is owned by Education Management Corporation. Education Management Corporation is a publicly traded company on the NASDAQ (EDMC) with a market capitalization in excess of $600 million. Goldman Sachs owns 43% of EDMC. The lease is fully guaranteed by Education Management Corporation with over five years of lease term remaining in the primary term.

The Brown Mackie College property is ideally located in the heart of the South Bend combined statistical area that has a total population in excess of 720,000 residents. There are over 230,000 people living within seven miles of the property earning average annual household incomes of approximately $60,000. The University of Notre Dame is located less than two miles to the west of the subject property. Notre Dame is one of the country’s premiere universities with approximately 12,000 students. The property is located just off of the signalized intersection of West Douglas Road and Grape Road. Grape Road is the dominant retail corridor in the trade area and home to many of the nation’s largest retailers as well as University Park Mall. University Park Mall is an 820,000 square foot mall located less than a mile north of Brown Mackie College and is owned by Simon Property Group. The mall is anchored by Macy’s, JCPenney, Sears, and Barnes & Noble. Other notable retailers in the immediate vicinity include SuperTarget, Walmart Supercenter, Sam’s Club, Meijer, Whole Food’s, Kohl’s, Lowe’s, and Home Depot.

The Brown Mackie College property will benefit from the extension and rerouting of Douglas Road that recently was completed. Douglas Road now begins at the Indiana Toll Road from the west and runs all the way through town.  This improvement will allow traffic exiting the toll road to have direct access to the property that is three miles to the east of the exit.

The Brown Mackie College in South Bend offers courses in the fields of nursing, healthcare & wellness, business & technology, and veterinary technology. The Brown Mackie College is well positioned for future success in the South Bend market due to the strength and prominence of the local health care industry. Healthcare and education are the two driving forces and leading employers in the South Bend region. Memorial Health System is the largest employer in the area and in 2012 merged with Elkhart General Hospital to form the Beacon Health System.  

Brown Mackie College is a system of for-profit colleges located in the United States. The colleges offer bachelor’s degrees, associate degrees and certificates in programs including early childhood education, information technology, health sciences and legal studies. Brown Mackie is owned and operated by Education Management Corporation. Education Management Corporate is a publicly traded company that trades on the NASDAQ (EDMC) with a market capitalization in excess of $600 million. EDMC has 110 campuses throughout the United States and Canada and over 120,000 enrolled students.

There are over five years remaining on the Education Management Corporation (NASDAQ: EDMC) guaranteed lease that expires in August 2019. This triple-net lease has two 5-year renewal options with rental escalations in each option.